Tuesday, July 1, 2008

Loss of faith..... V Vmbani

It is a day that would be remembered as one of the worst days in the history of the stock market. Not because the Sensex fell by 500 points (3.71%) or Midcap Sensex fell by 245 points (4.54%) or small cap Sensex fell by 317 points (4.73%) or BSE 500 fell by 213 points (4.08%). Above all this, it would be remembered as the day when all the six stocks of the Reliance ADAG fell across the board, falling between 3% to 14%.

Though the whole market has been in a tailspin, the disappointment from the ADAG stocks is more painful. Investors have always looked up the Reliance group with a lot of faith and consider it to be investor friendly but this free fall of the ADAG stocks, has today shattered this belief also. More than the market crash, it has actually been a day when faith got crushed.

Too much of manipulations -- cannot do any good and I do not see the market from Uma's eyes or for that matter anyone else's -- bulls or no bulls -- be ready for some bad times in reliance counters. Today’s fall in share price of all ADAG stocks, which has been supported with huge volumes, actually signals confidence crisis of institutional and high net worth investors. Are they sensing something which we are presently not able to? It is also said that market has stopped factoring futuristic announcements like early commencement of Sasan Power Project, procurement of EPC contracts by Reliance Infra, signing mega deal with Big B by Reliance Big Entertainment or setting up cement plants of Rs.10,000 crores by RNRL.

If the share price of the ADAG keeps falling like this, it will betray confidence of over 4 million investors of the group and hence would also damage the age old investor friendly image of the RELIANCE Group. Reliance becoming unreliable? Never thought a day like this would also come!

Anyway let me dissect what I should. I wanted not to wait for the morning for posting this I pulled up US and it was down to 1.5% -- just left it at that and had my dinner - by the time i came back there was a small recovery -- but that does not seem to be taking us anywhere. So most likely US will close red. Asia will open red and we will see another day with lower bottoms? Frankly the kind of fall we had today -- I did not foresee it and am sure that a lot others too did not see it coming. Any way the third candle of the three black crows has formed and it signifies more downside. Any rally or an attempt to do so will be killed in the bud by these crows. I was trying to see the effect of these crows and could not come up with any example where i could say that they lied. They ominous to bad times and forming second time -- the effect of first had not washed away so far.

That besides - the bollinger bands have widened once again and the candles are now violating the boundaries on daily basis. MACD negative widening continues. StochRSI, SlowStochastic and RSI are oversold but to what affect - no one can be sure. TRIX continues to face down. I could not get and accurate reading of TRIN but it seems to have dropped below 0.6 in probably .55 region. I will not touch it or what it means and leave it to Jaggu. Please click the link and see his page for TRIN.

Sorry to be gloomy -- but that is all that I have for now. GOD Bless.



Uma said...

I have nothing to lose in this crash. Both money and faith are gone :( As for the ADAG investors.... Good stocks sell like junk in a crash. Here we have real junk.

Uma said...

I don't think it's the long-term investors selling out of Reliance. Two years ago, the stock was selling at 1300 levels. And the rest of Nifty was selling at CURRENT levels.

S S Cheema said...

I agree - was never really fond of Reliance pack except that I was following the crowd. Too much hype for reliance power.
But it had to happen some day -- ups and down are part of natures cure for egos.

Uma said...

hehe right you are, Cheema!